Following is a list of cost system characteristics and sample companies. Match each to either job order costing or process costing.
h. A company that bottles milk into one-gallon containers.
Process costing system is used by the companies that bottles milk into large number of containers.
Step 1: Process costing system
Process costing system is applicable to the companies which manufacture the product in large quantity and the production process of which involves a series of procedures.
The company that bottles the milk into one gallon containers uses the process costing system to value the costing of the process performed by the company. It is so because the company is engaged in the production of similar product in large quantity.
The manufacturing records for Sporty Kayaks at the end of the 2018 fiscal year show the following information about manufacturing overhead:
Overhead allocated to production
Actual manufacturing overhead cost
Predetermined overhead allocation rate
$44 per machine hours
3. Prepare the journal entry to adjust for the underallocated or overallocated manufacturing overhead.
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